Belize’s largest bank, Belize Bank, has been pursuing for several years now the return of some $33.5 million it says it is owed on a loan note signed seven years ago by officers of the second Said Musa administration and the bank, in relation to monies owed by the former Universal Health Services (UHS), now Belize Healthcare Partners Limited (BHPL).
It says that of the $39 million advanced to them from the sale of assets originally owned in a super majority by the Government, $20 million had to be returned because it was intended for a different purpose, and so the settlement agreement covering which included an asset transfer agreement done in 2008 collapsed, and the Government remains on the hook.
But according to Government, the transaction was already concluded, and the Bank is allegedly trying to double dip for monies which were in fact never approved by the House of Representatives. The Bank went to court on Tuesday, seeking enforcement of an arbitral award by the London Court of International Arbitration given in January of 2013, in respect of the loan note, previously ruled valid by the Privy Council.
We spoke to Government’s attorney, Senior Counsel Denys Barrow, after the trial before Justice Shona Griffith.
“The argument of the Government is that section 114 of the Constitution says that you cannot pay any money out of public funds without the Constitution or some law authorizing it to be done. What was contemplated here was that the 2007 loan note was to be paid out of Government funds. That didn’t take place because rioted and prevented that taking place. This was Venezuelan money.
So Belize Bank took Government to arbitration. The Arbitration Tribunal decided that the loan note should be paid by Government. Government said, ‘If we pay that loan note, we would be paying money out of the national treasury for which no law makes provision. Therefore it would be illegal, and to pay the award now would be just half a step away from paying an illegal transaction.’
Therefore the Government objects to it, and said that the Caribbean Court of Justice recently decided that if it will be contrary to public policy, because it will be an illegal payment to do something or to order the enforcement of something, then the Caribbean Court of Justice said, ‘We will not order enforcement.’ So we are asking that to be done.”
The Government is also arguing that the LCIA court was not properly constituted because their court-appointed arbitrator was alleged to have an appearance of bias. But they had earlier refused an opportunity to participate and lost their opportunity to appoint an arbitrator. We asked Senior Counsel Barrow about whether that refusal hurts their case.
“Possibly, and possibly not. It may well be that it was in the Government’s interest to reserve its position, and then there is this aspect that has just come out which, whether or not we had participated, would have still been left there to be determined. So it’s a moot question.”
The Bank’s attorneys, Senior Counsel Eamon Courtenay and Jose Alpuche, admit that their clients initially wiped off the debt in 2007 in anticipation of settlement but because the arrangement fell through they fell back on the loan note. They also argued that the Bank was not a party to the Asset Transfer Agreement between BHPL, a private group of investors, and UHS. But according to Barrow, the entire truth is not and may never be told.
“This is where, again, the concealment and the deception come in. The Belize Bank got twenty million Belize [dollars]; ten million from Taiwan, ten million from Venezuela, which was paid to Belize Bank to wipe off the debt. Central Bank took back 20 [million dollars] Belize.
Apart from that, what did the Belize Bank do with the twenty million dollars before it was taken back? They took the money and they lent it to this new entity called Belize Healthcare Partners Limited.
What did Belize Healthcare Partners Limited do? They took 39 million dollars of the money, and then borrowed from Government, and buy the assets of UHS, and then pay the Belize Bank the 39 million dollars that they borrowed from the Belize Bank.”
Madam Justice Griffith has reserved her judgment for December 16, 2014.